Trading day in One Post 05.01.2016

In volatile trade, the Shanghai Composite closed down 8.55 points, or 0.26 percent, at 3,287.7 after rising as much as 0.95 percent and falling as much as 3.2 percent earlier in the session. The smaller Shenzhen Composite finished down 39.38 points, or 1.86 percent, at 2,079.77, while the CSI300 erased losses to end up 9.71 points, or 0.28 percent, at 3,478.78 after falling as much as 2.65 percent intraday.

Before trading started, the People's Bank of China set Tuesday's yuan fix at 6.5169 against the dollar, compared with Monday's fix of 6.5032, representing a 0.21 percent increase.

The negative news for the Chinese economy published Monday morning, reestablished concerns for the slow down of Chinese economy growth.

The Australian and the New Zealand dollar show a raise in terns of their European rivals during the session, because of the stimulus in China

‘The positive sentiments for the gold continued during the Asian session, marking a raise of 5.5 dollars. Most likely is still being used as a risk shelter.

The black gold continues its movement in the range without making any significant movements.

A quiet start of the European session is expected even a slight increase in the indices’ futures because of the stimulus in China but everything could turn out to be temporary movement, after which we might see a downward impulse.

According to Goldman Sachs the sale in the beginning of the first working week of the New Year have been caused from factors such as worry of liquidity, capital redistribution, contractionary monetary policy and etc.

The markets follow closely the situation with the Global economic slowdown as well as look for development in the tensed relations between the countries in the Middle East.

Today is a relatively poor day in terms of economic releases, as only Europe and Canada show some interesting news:

10:55 Unemployment Rate s.a. (Dec) 6.3% vs 6.3%

10:55 Unemployment Change (Dec) -6 000 vs -13 000

11:30 PMI Construction (Dec) 56 vs 55.3

12:00 European Consumer Price Index - Core (YoY) 0% vs 0.9%

12:00 Eurozone consumer price index 0.3% vs 0.2%
12:00 Consumer Price Index (MoM) Prelimenary 0.1% vs -0.4%

12:00 Consumer Price Index (YoY) Prelimenary 0.2% vs 0.1%

12:00 Consumer Price Index (EU Norm) (MoM) 0.2% vs -0.4%

12:00 Consumer Price Index (EU Norm) (YoY) 0.4% vs 0.2%

15:30 Industrial Product Price (MoM) 0.0% vs -0.5%

Because of the fact that the day is poor on economic news, most likely the financial instruments will keep their movement direction form yesterday, Today’s corrections offer good levels for new positions in the trend’s direction.

EUR/JPY, also, most likely will keep the movement in the downward direction, because of the negative sentiments on the funds’ markets which will lead to capital redirection to a shelter such as the yen.

The probability that the indices will register a new decrease is very significant as we are in the first days of January when the so-called “January effect” takes the lead, closing of some of the portfolios and their reconstruction.

The caution on the markets will lead to an increase in the USD today.

Stefan D. Angelov - Head of Stock Trading

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